updated 05:28 pm EST, Wed February 27, 2013

In-app purchase allows for listening after cutoff

Streaming music provider Pandora announced today that it would cease its unlimited ad-supported mobile music streaming. Starting March 1, US Pandora listeners will be reduced to 40 hours of free ad-supported streaming by way of mobile devices every month, unless they choose a $0.99 in-app purchase to continue listening for the rest of the month. The policy change does not affect users paying for the premium "Pandora One" service.

Pandora CEO Joe Kennedy told Mashable that "we're conscious that those royalty rates are scheduled to go up another 16 percent over the next couple of years. So we're trying to be very balanced. We want people to continue to listen to and enjoy Pandora. We hate to bring any limit to that listening, but think that this is really a balance that we need to maintain."

The average mobile user spends just over 20 hours on the service across desktop and mobile. Today's policy change is expected to affect only four percent of Pandora's customer base.

"We do see this as not a permanent change, but an appropriate and necessary balancing for this stage of development given the royalty cost that we bear," said Kennedy. Users likely to be affected by the change will be emailed over the next several days with details of the shift.